Mobile Health Electronics Ltd Manufacturing: Enterprise System Analysis And Software Selection Essay.

Background

Background

Mobile Health Electronics Ltd (MHE) is an Australian manufacturer of wearable monitoring devices that are sold for use in hospitals and retail outlets. Their home office is in Melbourne, which is also the headquarters for the main sales office. A sales office is also located in Sydney, NSW. The company has two manufacturing plants in Australia: one in Melbourne, and another one in Liverpool, NSW. Distribution centres are also located at each of the current manufacturing plants. The company recently added a China sales force in Beijing which includes a manufacturing facility and a distribution centre. The company is keen to expand into India, to develop and sell healthcare mobile hand-held computers there, and also open a sales and trainings office in the UK to expand its operation in Europe and North America.

Each of the manufacturing plants acts as an independent company maintaining separate sets of books and operating more or less autonomously. The Melbourne home office has had their own ERP system for 7 years but Liverpool and Sydney’s operation have been supported by using a variety of legacy systems to assist their manufacturing plant, human resource, financials, procurement and sales and distribution.

With a wide range of IT systems in place, the company thinks a centralised and robust ERP system will allow for process standardisation across its plants and offices, particularly to enable centralized procurement and sales functions. They also want to be able to consolidate financial statements as well as look at sales by product across the companies.

Selling of the products is done with a sales force that calls on warehouse and retail sales outlets such as, JB Hi Fi, OfficeWorks, and Harvey Norman stores, or by directing visiting hospitals and healthcare service providers. The Company also manufactures and sells replacement parts.

Traditionally, the company’s CEO and marketing manager travel to trade fares around the world to promote their scanners and mobile hand-held computers. However, they have been also looking into

starting an on-line shopping cart web site where they could promote their products and sell parts and products online. They are also considering providing online trainings to their sales representatives and staff across the world.

Mobile Health Electronics Ltd is a growing company that needs standard operations across its manufacturing, sales and inventory activities. Currently, its IT systems lack the flexibility and scalability to support its growth into new markets over the next decade. Furthermore, the current IT systems do not provide the data standardization needed for analysing the costs and profitability of different products, by sales regions and customer. Mobile Health Electronics Ltd is yet to develop a healthcare mobile hand-held computer which can be used in both developed and developing countries but again their systems need to be upgraded to allow for this strategic direction. Another key strategy for MHE is its commitment to customer satisfaction by delivering the product(s) at the right time, right place, and at the right price. This may require make to order as well as make to stock products. MHE is organized around processes that are focused on the value add to customers.

Current Challenges

Some additional high-level facts about MHE are as follows:

• MHE products need to be customized for value added resellers (VARs) by application of the reseller’s logo at assembly.

• Individual customers do not have direct influence over the product or its function, shape, and size; however this is something that the Board of Directors (BoDs) is considering changing in the future to allow individual customers the opportunity to create specialised mobile devices.

• Sales planning and product design are determined by management in cooperation with other staff members.

• All sales are maintained in Australian/US currency only, even though the company does business with other countries like China.

• The company currently sources “raw materials” - parts, subassemblies and even one final product from Korea, Japan, and Germany. These components require strict quality assurance processes. The company is keen to maintain its current network of suppliers but also seeking possibilities of working with more suppliers from other countries such as the US and New Zealand.

With the fast changing and highly competitive business environment, the management of MHE have realised that the current implementation of their legacy ERP and other enterprise systems which have been in operation for about 7 years has its share of limitations. The management has realised that new business requirements and drivers are emerging. They have also realized if they are not proactive, the emerging requirements can negatively influence the company’s competitive advantage and market share and as such, they need to act quickly.

Also, the traditional hyper-connected customer centric business models adopted by MHE are causing the company to fall behind in its interactions with its customers as customers are the real drive for change. However, the company is currently very slow to respond and adapt to changing circumstances.nt priority. The increasing mobility of managers, staff, clients and competitors, has created a huge network of mobile information and expertise. The company has realized that they need an effective and efficient way of supporting, managing and taking advantage of the networking opportunities that such a network of mobile workforce and clients offer. They are particularly interested in taking advantage of such a network for improving the design of their products and also developing a collaborative marketing strategy.

You are employed by Mobile Health Electronics Ltd as a Business Systems Requirements Analyst on a contractual basis. You have had extensive experience with enterprise systems projects, specifically in managing software implementations in manufacturing organisations.

You have been asked by the Board to work on the Enterprise System adoption and implementation. You need to prepare a report that helps the BoD to make an informed decision with regards to purchasing an ERP system. Your report and recommendations should include the following information:

Strategic considerations

Briefly analyse and argue the benefits and drawbacks of using a new ERP system.

Business requirements and drivers

Develop a list of MHE’s business requirements and business drivers (at least 10 items). Provide a brief description for each item on the list. Make sure your description is linked to MHE and its business context.

Using the list you developed in A2, create a table that includes:

1- A column of the identified items on the list

2- A column that specifies whether each item is a business driver or a business requirement

3- Identify business process(es) that can support or fulfill each of these business drivers or requirements

4- Identify the type of data or information that is required for the successful completion of each business process.

5- Against each business driver or requirement in the table, choose ERP functionalities that can help MHE to meet/achieve the business requirement/driver.

6- Provide a justification for each choice you made in step 5.

Information and assumptions

Identify any other information you would require for recommending the best ERP solution to MHE. Identify where this information can potentially be found (information sources) and then make assumptions in your report about the information items. You need to justify your assumptions by explaining why they are valid assumptions and how they may impact your recommendations.

Recommendation of a solution

Using the information you identified in Section A and the assumptions you made in Section B1, research the following enterprise systems and recommend the best solution to MHE.

• SAP Business Suite 4 SAP HANA (a.k.a SAP S/4HANA)

• SAP ECC6

• Sage X3

Your answer needs to be justified. Use a Rich Picture approach to justify your recommended solution.

C- Laying the foundations for business value and digital transformation through digital disruption

The management team of Mobile Health Electronics Ltd is fully aware that they need to lay the foundations for business value and digital business transformation. This focus was something they considered when they decided to implement a new ERP system suite. The Board of Directors is concerned if they do not focus their future approach on digital transformation they will lose their competitive advantage with their customers and be left behind.

The CEO of Mobile Health Electronics Ltd has recently attended a Deloitte presentation: “Harnessing the ‘bang’: Stories from the digital frontline.” Findings indicate that 13 industries comprising 65% of the Australian economy are facing significant digital disruption by 2017. (Located at:http://www2.deloitte.com/au/en/pages/building-lucky-country/articles/digital-disruption-harnessing-the-bang.html)

• Define what is meant by digital disruption by using case studies as examples to aid your definition.

• Discuss the major advantages and disadvantages (risks) to Mobile Health Electronics Ltd should they not focus their attention on digital disruption.

• Identify specific ways in which Mobile Health Electronics Ltd can improve:
  • Their digital disruption performance,
    

• competitive differentiation and
  

• growth in the future
  

• Conclude with a recommendation on your findings for Mobile Health Electronics Ltd.

The ERP of Enterprise Resource Planning is the process through which the organization can handle and integrates the significant aspects of business (Ram, Wu and Tagg 2014). The ERP can be a very large scale process that is consist of all the business processes of an organization. Various vendors sells the ERP software. These software need to be customized as per organization need.

In this report, Medical Health Electronics Ltd. organization’s ERP implementation overview has been provided in brief. The report holds the information regarding project scope and background. Apart from that the business case, software selection process and digital disruption related information has been provided.

The project is about development of organization wide ERP system implementation in MHE. The project will be done through developing subsystems in different offices of the organization and integrating them with the ERP in Melbourne head office. Proper planning will be done for identifying the requirements and challenges of system implementation. New technologies will be developed in the offices along with modification of old technology. Establishing a connection between Melbourne head office, manufacturing plant at Liverpool and Melbourne, manufacturing facility and a distribution center in China and proposed offices in India and UK. Improving the communication between the head office and sales representative as well as organization and customer. Gathering the data regarding the need of customer and purchase history as much as possible.

The developed report is for the board of directors of Mobile Health Electronics Ltd. The board of directors are seeking a report regarding the ERP implementation perquisites that can assist them in gaining better understanding of situation. The directors will be able to analyses the business needs and suitably justify the ERP implementation at MHE. This report is will have a great influence over the board of directors regarding the decisions that they will take for buying a ERP software for the organization.

The project is undertaken by Mobile Health Electronics Ltd for making their communication among the offices (within NSW and abroad) and daily operations more effective and proficient. The organization needs a technology that can standardize their manufacturing, inventory and sales processes. The ERP system project has been proposed for developing a single connected collaborative technology that can make the organization scalable and flexible to its progress within the new market over the coming years. There are three possible software that Mobile Health Electronics Ltd can use as their technology such as SAP Business Suite 4 SAP HANA, SAP ECC6 and Sage X3.

Individual ERP software supports different business situations and needs to be integrated with different technology. Proper analysis of these software will only provide the insights of the technology these consist of. However, comparing the features and technologies with business requirement will provide better understanding of suitability of the software regarding MHE infrastructure. The project is consist of various phases like planning, requirement gathering, analysis, designing, development and testing. As the project is a big project and needs to be consider scope creep issue, the project should be done through considering an adaptive SDLC approach. The project is also responsible for improving the competitive approach toward the market. The project will provide better customer relationship so that better competitive approach can be established.

Current Challenges

Analysis of Current Situation:

A.A1 Advantages and Disadvantages:

Advantages of ERP: The advantages of ERP are as following.

• The ERP provides insights to the entire significant processes. This is provided throughput the whole organization (all the departments of MHE). This is very beneficial for the board of directors and sales personnel (Nour and Mouakket 2013).
• The ERP system provides logical and automatic workflow among the departments. This will result into better and fluent process completion as well as efficient transition. The management and other responsible employees will be able to track the processes of the organization effectively.
• The ERP provides the opportunity of single and unified reporting system to Mobile Health Electronics Ltd (Powell et al. 2013).

Disadvantages of ERP: The disadvantages of ERP are as following.

• The charge of implementing an ERP within organization is more than most of the technology development (Nour and Mouakket 2013).
• The time taken for implementing an ERP within MHE may take one and a half year.
• Massive amount of customization is required for integrating an ERP within MHE (as per the organization need and size)
• It is very difficult to integrate the existing data within the ERP system. The organization is currently using various standalone software. Integrating these software within ERP is equally difficult to data migration (Ram, Wu and Tagg 2014).

The business requirements and drivers of Mobile Health Electronics Ltd are as following.

The biggest need at this point is the communication among the departments and different regional offices of MHE. The organization does not have any communication medium within itself that can allow data automatic and fluent transmission among the offices at Liverpool, Melbourne and China.

Another business requirement is customer data gathering. MHE does not have any system that can properly collect and analyses the customer need. A proper CRM or similar application can provide the organization opportunity of providing customized products to the customers.

The growing market opportunities is a significant business driver. The organization is currently expanding to various centuries like China, India and UK. In this circumstances, gathering the most of the opportunities from the markets of these countries is a vital aspect of business.

The manufacturing process is the most vital business driver of Mobile Health Electronics Ltd. The organization at present in need of modifying its manufacturing process to standard process.

Sales process is another business factor for Mobile Health Electronics Ltd. The organization depends on the sales personnel and process quality in selling the products. The need of standardization of sales process cannot be neglected at the time of ERP implementation.

The technology, asset of MHE, is the business driver. The organization is required to implement various technologies as per need in the different offices and its departments. Identifying the technologies and distinguishing needs of departments can provide significant advantage.

A way of gathering the data regarding the sales is another crucial business requirement of MHE. The organization needs the sales data and store it within some place so that it can be used for coming years. This data can provide insights to the customer buying patterns and provide decision making aids to management.

Sales planning process is a business driver that needs to be considered as important factor during system development. The process done by three stakeholders like management and sales personnel.

Workforce engagement is another business requirement of MHE. The mobile use of mobile due to increase mobility in of business process has significantly increased.

The external stakeholders, suppliers of raw materials, are a critical MHE business driver. These suppliers provide parts, subassemblies and even one final product from Korea, Japan, and Germany.

Name	Business Driver or Requirement	Business Process to support or fulfill	Required data type	ERP Functionality	Justification of ERP Functionality
Communication (advanced network)	Business requirement	Data transmission from one department/office to another	All types of business related data	Report system, data transmission	The sales personnel will create report and these report are needed to be send to the management at head office The data gathered from various sources and parts of business needs to be transferred to head office and other required department
Customer data gathering	Business requirement	Gathering customer data through various input devices and store it for future use	Customer personal data along with purchase history	Customer relationship management	The customer relationship management allows the system to gather various personal data of customer The CRM uses the store data to derive customer purchase patterns and suggest various decision making aids to the management
Market opportunities	Business driver	Planning and budgeting is and Reusability are the business processes for supporting marketing opportunity	Market competition related data, sales data, customer buying patter data and future predictions of market	Providing market decision related suggestions to management	The market related decisions are very hard and critical for business. The system should be able support the business through analyzing a huge amount of data and providing decision aids.
Technology	Business driver	Continuous improving	System error and challenge related data	Providing suggestion related to improving the system	The system stores the issues that has been occurring within the system.  These reports will be analyzed by the system and provide suggestions to improve the system
Manufacturing process	Business requirement	Order management	Order and inventory related data	Order management and inventory management	The system will store the orders and inventory related data so that product production and delivery can be compared and required amount of products can be manufactured
Sales process	Business driver	Sales process tracking and control	The sales related data	Sales process management	The system will analyze the sales of individual product and sales personnel to produce various reports and suggestion decisions
Sales planning	Business driver	The sales planning process	Sales related data	Sales process management	The system will analyze the sales of individual product and sales personnel to produce various reports and suggestion decisions

Controlling ERP: The organization is a big one and ERP will be covering all the aspects of the business throughout country and abroad. The Board of Directors must be able to control the processes and outcome of the ERP processes.

ERP with Integrated Software: The standalone software that the organization is currently using in various offices must be integrated within ERP. This is a critical process. However, a successful integration will allow the organization to provide better experience for the employees.

Management Information: The information should be able to store all the data gathered from various level of business. These data will be stored within the data storage called database. After storing, these data will be retrieved for analysis and some information for management process aid will be generated. These data will be assisting the management to make better decision.

Figure 1: The Rich Picture of Software Selection Recommendation

(Source: Created by Author)

Definition:

The term digital disruption is becoming anything of a cliché lately and is frequently abused to describe any solution involving digital technology or the employment of digitization to greater compete against marketplace peers.

The advantages are as following.

• Better communication among offices
• Responsive management
• Robust manufacturing processes
• Quicker sales support team

The disadvantages are as following.

• Long distance offices may cause security threats
• The manufacturing process may be need to be changed completely
• The proposed plan for customer customization goods may affect the employee consistency in work

The digital disruption is surely a fact the MHE must consider as important.

• Recalibrating cost structures:Creating improvements in relation to people, supply chain and overheads to higher get a handle on charges and contend with digitally-powered, low-cost newcomers. One of the very most profound company issues posed by digital disruption is that new digital attackers often have substantially cheaper structures than incumbents. A current study of Australia's retail environment, as an example, discovered that online prices were between 19 per penny and 64 per penny under these priced in stores.11 In this environment, big scale can move from being a plus to a disadvantage. New digital players are generally also well placed to supply remarkable quantities of selection and convenience. To keep aggressive, incumbents should recalibrate their price structures by dramatically rethinking how they strategy the three key drivers of price: the expense of things offered through the supply chain; team charges; and administrative overheads (Swiegers 2013).
• Replenishing revenue streams:Building new resources of revenue across sectors, geographies and company designs as heritage channels dry in the wake of digital disruption.
• Reshaping corporate strategies:Reconsidering resources, risk and corporate agility to place the organisation for success in the increasingly digital world.

The recommendation for ERP implementation are as following.

• Flexibility:The ERP must be flexible.
• Scalability:The system should be able to cope with production need
• Secure:The system need to be able to identify any aberration in work done by staff. It must be able to prevent cyber-attacks.

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